PLR 1029013: IRS grants late-filed accounting-period change relief

Plain-English summary

A taxpayer asked the IRS to treat a late-filed Form 1128 as timely so it could change its federal tax year. The taxpayer said it intended to file on time but missed the deadline because of an error by its representative, and that it would have qualified for the automatic-consent procedure had the form been timely filed. The IRS found that the taxpayer acted reasonably and in good faith and that granting relief would not prejudice the government. The late-filed Form 1128 would be treated as timely if filed with the appropriate IRS office within 60 days of the ruling letter, but the ruling did not decide whether the requested accounting-period change was otherwise permitted.

Ruling snapshot

• Question: Could the taxpayer's late-filed Form 1128 be treated as timely under Treas. Reg. § 301.9100-3?
• Outcome: approved, subject to filing within 60 days
• Key authorities: Treas. Reg. §§ 301.9100-1(a), 301.9100-2, and 301.9100-3; Rev. Proc. 2006-45; Rev. Proc. 2007-64; IRC § 6110(k)(3)

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201029013 Third Party Communication: None
Release Date: 7/23/2010 Date of Communication: Not Applicable
Index Number: 9100.09-00
Person To Contact:
------------------------ ----------------, ID No. ------------
------- Telephone Number:
---------------------------- ---------------------
---------------------- Refer Reply To:
------------ CC:ITA:B05
------------------------------------ PLR-147484-09
Date: April 21, 2010

In Re:
----------------------------
EIN: ----------------

Legend:
Taxpayer: ----------------------------
Year 1: -------
Year 2: -------
Date 1: ----------
Date 2: ------------------
Date 3: -------------------

Dear -------------------:

   This ruling letter is in reference to Taxpayer’s request that its Form 1128,

Application to Adopt, Change, or Retain a Tax Year, be considered timely filed under
the authority contained in § 301.9100-3 of the Procedure and Administration
Regulations.

   Taxpayer seeks to change its taxable year for federal income tax purposes from

a taxable year ending Date 1, to a taxable year ending Date 2, effective Date 2, Year 1.
Taxpayer’s Form 1128, requesting a change in accounting period, was due on or before
the extended due date, Date 3, Year 2, but was not timely filed. Taxpayer states that if it
had timely filed its Form 1128, it would qualify to effect the change in accounting period
under the automatic consent procedures of Rev. Proc. 2006-45, 2006-2 C.B. 851, as
modified and clarified by Rev. Proc. 2007-64, 2007-2 C.B. 818. The information
furnished indicates that Taxpayer intended to make the change in a timely manner, but
that due to an error on the part of Taxpayer’s representative, the form was not timely
filed.

PLR-147484-09 2

    Section 301.9100-1(a) of the regulations provides that requests for extensions of

time for regulatory elections that do not meet the requirements of § 301.9100-2
(automatic extensions), such as the instant case, must be made under the rules of
§ 301.9100-3. Requests for relief subject to § 301.9100-3 will be granted when the
taxpayer provides evidence to establish that the taxpayer acted reasonably and in good
faith, and that the granting of relief will not prejudice the interests of the government.

    Based on the facts and information submitted and the representations made, we

conclude that Taxpayer acted reasonably and in good faith, and that the granting of
relief will not prejudice the interests of the government. Taxpayer’s late-filed Form 1128
requesting permission to change to a tax year ending Date 2, effective for the tax year
ending Date 2, Year 1, will be considered timely filed if it is filed with the appropriate
Internal Revenue Service office within 60 days of the date of this letter. Please submit
the Form 1128, together with a copy of this letter, to Director, Internal Revenue Service
Center, Attention: ENTITY CONTROL, where Taxpayer files its federal income tax
return.

CAVEATS

   The ruling contained in this letter is based upon facts, representations, and

affidavits furnished by Taxpayer. This office has not verified any of the materials
submitted in support of the requested ruling. The materials are subject to verification on
examination.

  This ruling addresses the granting of § 301.9100-3 relief only. No opinion is

expressed or implied as to whether Taxpayer is permitted under the Internal Revenue
Code or the applicable regulations to change to the tax year it requested in its Form 1128
or whether Taxpayer can make the change under Rev. Proc. 2006-45.

   This ruling is directed only to the taxpayer that requested it. Section 6110(k)(3)

of the Code provides that it may not be used or cited as precedent.

  Copies of this letter ruling are being provided to Taxpayer’s authorized

representatives.

                                  Sincerely,



                                  Amy J. Pfalzgraf
                                  Senior Counsel, Branch 5
                                  Office of Associate Chief Counsel
                                  (Income Tax & Accounting)